North American and European Executives Say Business Strategy Depends Largely on Innovation,Yet Corporate Responsibility for Innovation Is Highly Fragmented, Accenture Survey Shows

Frequency of innovation, “speed to market” are key competitive challenges

NEW YORK; April 3, 2008 – Business strategy is driven largely by innovation, but corporate responsibility for the innovation process is highly fragmented, according to findings of a survey published today by Accenture (NYSE: ACN).

The survey of 601 senior executives in the United States, United Kingdom, Germany and Canada found that innovation is a top corporate priority, but it also indicates that more senior-level accountability, greater CEO involvement and improved speed-to-market execution can help companies deliver on their promise of innovation and boost their competitiveness.

While nearly two-thirds (62 percent) of respondents said that their organization’s business strategy is either totally or largely dependent on innovation, only 21 percent of respondents said their companies have a chief innovation executive, and even fewer — 11 percent — said there is a C-suite executive in charge of the process. Nearly half (48 percent) of respondents said that multiple executives are responsible for innovation in their companies.

The survey also found that companies that are successful with innovation are likely to have a chief innovation executive.Specifically, 40 percent of respondents who said their company’s level of innovation is much stronger than that of their competitors also said that the person primarily in charge of innovation is a chief innovation executive.

The findings indicate that the challenge of innovation for organizations is not commitment and intent but rather execution against the innovation vision.While 59 percent of executives said that the level of support their CEO gives to innovation is greater than the level of support of CEOs at their closest industry competitors, a majority (57 percent) of respondents also said that their organization’s speed of innovation was slower than that of industry peers, and about the same number (55 percent) said that their frequency of innovation was less than that of their industry peers.

“The role of the CEO in the innovation process has grown dramatically in its importance and needs to evolve from vision- and direction-setting to enabling and driving execution,” said Dan Chow, a senior executive in Accenture’s Strategy practice. “CEOs need to properly align resources and action with the innovation vision and performance goals.However, simply having a vision for innovation and naming an executive to head innovation is not enough to make it work. Senior management must look at innovation as a core process to be actively managed; avoid a quick-fix approach; and focus their energy on execution.”

Respondents are concerned not only about their ability to generate new ideas, but also with their ability to consistently transform innovation into action. Only 15 percent of respondents said they are very satisfied with their company’s ability to convert ideas into service offerings, and only 13 percent said they can do it repeatedly. High on the list of innovation challenges cited by respondents are transforming ideas into marketable goods and services, cited by 29 percent of respondents, and creating a proper execution strategy, cited by 26 percent of respondents.

Respondents were asked how they would rate innovation in various regions, regardless of whether their organization has operations there or not. While respondents regard North America as the most innovative region – selected as “highly innovative” by 50 percent of respondents - they also consider Asia to be more innovative than Europe. Specifically, more than one-third (38 percent) of all respondents said that Asia is highly innovative, compared with just 22 percent who said that Western Europe is highly innovative.Interestingly, respondents in the United Kingdom and Germany share this view: Only 21 percent of UK respondents said that Western Europe was highly innovative, compared with 39 percent of UK respondents who said the same about the Asia Pacific region. Similarly, only 23 percent of German respondents said Western Europe was highly innovative, while 34 percent of them said Asia Pacific was highly innovative.

“The results of this survey validate Accenture’s research into a phenomenon we refer to as the multi-polar world, in which economic power once largely embedded in the United States, Japan and Western Europe is being dispersed much more broadly around the globe,” said Mark Spelman, global lead of Accenture’s Strategy practice. “Emerging-market multinationals are becoming increasingly adept at innovation, and their presence is being felt everywhere. In order to achieve high performance and remain competitive in this new environment, global companies must emphasize collaboration in innovation – with consumers, suppliers and within their own companies across borders.”

About the survey

In late 2007, The Economist Intelligence Unit (EIU) conducted a survey on behalf of Accenture of 601 executives at major companies in North America and Europe. Respondents included board members, CEOs, CFOs and other C-level executives, as well as senior managers. All of the respondents’ companies have more than US$750 million in annual revenues, and nearly two-thirds have annual revenues of at least US$5 billion. The majority of respondents (58 percent) were based in the United States, with the rest based in the United Kingdom (16 percent), Germany (15 percent) and Canada (11 percent). The companies represent a broad range of industries, including financial services, technology, energy, logistics, aerospace, defense, media/entertainment, manufacturing and professional services.

About Accenture

Accenture is a global management consulting, technology services and outsourcing company. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. With 178,000 people in 49 countries, the company generated net revenues of US$19.70 billion for the fiscal year ended Aug. 31, 2007. Its home page is www.accenture.com.

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